P3 Defined

O & M Concession [ Existing Facilities ]

Public Owner/Financier (Operator - with state or local government debt) transfers responsibility to Private Program Manager/Financial Advisor and their Public/Private Operator and private Contractor and Engineer.

Public operating agencies utilize operations and maintenance
(O&M) concessions to transfer responsibility for asset
operation and management to the private sector. These comprehensive
agreements involve both service and management aspects and
can be useful in encouraging enhanced efficiencies and technological
sophistication. Contractors can be paid either on a fixed
fee basis or on an incentive basis, where they receive premiums
for meeting specified service levels or performance targets.

Responsibilities

Operations and maintenance concessions may be used as a
means to transfer responsibilities for a single highway facility
or a group of facilities. These contracts transfer responsibility
for ongoing activities such as snow removal and grass mowing,
as well as maintenance and major repairs. When in the purview
of the public sector, decisions on major repairs can be affected
by budget availability or other political sensitivities.
Transferring that responsibility to the private sector may
allow owners to take better advantage of lifecycle cost
and asset management practices.

Asset Management Practices

Asset management is a strategic approach to managing the
ongoing maintenance needs of physical assets such as transportation
infrastructure. It involves the economic assessment of tradeoffs
among alternative maintenance investment options, and as
such combines engineering and economic analysis to identify
cost-effective investment decisions. The asset management
approach emphasizes the preservation, upgrading, and timely
replacement of highway assets through cost-effective planning
and resource allocation decisions. It often results in the
use preventive maintenance techniques, rather than waiting
for a highway, bridge or tunnel to deteriorate significantly
before rehabilitating it.